PANL: News of ‘Flexible’ OLEDs at CES Should be a Positive, Says JMP

By Tiernan Ray

JMP Securities‘s Alex Gauna today reiterates a Market Outperform rating and a $45 price target on shares of organic LED (OLED) technology developer Universal Display (PANL), writing that the company will probably receive positive headlines at the Consumer Electronics Show that kicks off this coming Sunday in Las Vegas.

“Reports are out that 5.5-inch OLED flexible displays and 55-inch OLED HDTVs will be on display at CES in the second week of January,” writes Gauna, “and we see good potential for these positive headline catalysts to be given greater weight with the fleshing out of go-to-market details and timetables that are presently pointing towards 2H13.”

Gauna offers some details on the possible importance of flexible OLED displays:

Samsung [Electronics (005930KS)] 5.5-inch flexible and 55-inch HDTV OLED displays are expected at CES and indications are mounting that flexible displays will be ready for commercialization by 2H13. Speculation around flexible display adoption for a range of smartphones has emerged and includes flagship models such as the Samsung Galaxy Note 3 or Motorola X phone. Flexible displays should drive incremental Universal Display growth, in our view, by broadening the appeal of OLED technology in general and incorporating its green emitters specifically.

He also thinks 2013 will be a “robust” year for OLED display demand, and sees the technology going from 20% or so of the smartphone market this year to perhaps “a majority share of a one billion unit plus smartphone opportunity by 2015.”

The only real concern at the moment that Gauna expresses is a competing technology called “IGZO” that may become important for smartphones. At the moment, it doesn’t seem Gauna believes it poses any serious threat:

We are following developments around Sharp (6753JP) IGZO technology but have not seen anything to alter our share gain expectations for OLED technologies. Qualcomm (QCOM) recently completed an investment infusion into Sharp and there is speculation that Apple (AAPL) has interest in IGZO, which strikes us as a matter of course given friction with Samsung.

Universal shares today are up 16 cents, or 0.7%, at $24.76.

Update: Tuesday, TheVerge’s Sean Hollisterreported that LG announced it will ship its 55-inch OLED TV next month in South Korea, with pre-orders being taken January 2nd. The price, reports Hollister, is ₩11 million, or roughly $10,000, which is more than the $8,000 or so that had been expected previously.

Great, thanks for that link Tiernan. With an extra year under their belt to work on OLED efficacy this could finally be the year, agreed. It would be cruel of them to show us that TV again without letting us buy it!

Samsung would certainly put some pressure on Apple if they stick to their 1H timeline for the start of some production on flexible displays as well. Interesting how they, not Apple, seem to be pushing the innovation envelope more these days.

DECEMBER 31, 2012 3:54 P.M.

Tiernan Ray wrote:

PB: See also the latest post, where Cowen talks about the prospect of the sets actually shipping:

Discussions for OLED TV shipping in volume for 2013 should include what is happening from LG's M2 oled production line and its yield vs SMD and its V2 production line/yields. IZGO may not be a competing technology to oled but rather one that hasn't yet been applied to produce oled from Sharp. There is serious discussion whether IZGO is the right choice for large area production of oled or competing technologies. Sharp demonstrated IZGO based oled screens in June of 2012. It may not best be represented as exclusive. Delays by LG and SMD may open the door for Apple/Sharp IZGO oled TV competition. Key though for PANL is whether Sharp's IZGO oled would use UDC materials.

DECEMBER 31, 2012 5:22 P.M.

slj wrote:

follow up on IZGO/Apple :
"BrightWire, a business-to-business resource for portfolio managers, is reporting this morning that a report published by Tokyo's daily newspaper Yomiuri Shimbun is stating that Sharp has officially ended small to mid-sized IGZO LCD panel supply to Apple due to low profitability. At this time it's difficult to assess whether their public reasoning is factual or just a face saving measure due to Apple dumping the IGZO display due to production delays."
Hard to say then exactly where Sharp and Apple sit on the future of IZGO.

DECEMBER 31, 2012 5:31 P.M.

slj wrote:

follow up to follow up:
"DigiTimes also reports today that Apple is inquiring about whether AU Optronics L5C line could be used to produce IGZO displays. Additionally, the report states that Innolux Corporation could enter Apple's supply chain as they've licensed IGZO technology from Sharp. This move may explain the news that leaked earlier this week that Sharp is set to end IGZO LCD Panel Supply to Apple. The twist to this news is that Sharp is likely to not supply the displays to Apple, directly. "

JANUARY 2, 2013 11:05 A.M.

slj wrote:

Update regarding LG from oled-info:
"So - exactly one year after unveiling the 55EM9700 LGD announced today that they are accepting pre-orders for their 55" WRGB OLED TV in Korea - with deliveries to begin in the first week of February. The price? as expected, 11 million Won (about $10,000).
LGD said that over the next several weeks they will announce launches in other markets. Obviously we expect the US to come soon, but apparently LGD is also preparing launches in Russia and China. LGD will offer the TV in over 1,400 LG retail stores in South Korea beginning tomorrow.
LG says they are "prepared to ramp up quickly to take the lead in the OLED segment". They see OLED as the "most transformational moment" in the TV industry since the introduction of the color TV 60 years ago.
The 55" 55EM9700 is a Full-HD panel that features 100,000,000:1 contrast ratio and fast response time (1,000 times faster than LCD according to LG). The panel is only 4mm thick and weighs only 3.5Kg. The OLED panel is based on LG Display's Oxide-TFT white-OLED with color filters (WRGB) OLED panel."

About Tech Trader Daily

Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.